Serious Crypto ‘Washout’ Warning As Massive $300 Billion Price Flash Crash Suddenly Tanks Bitcoin, Ethereum, Ripple’s XRP And Cardano

Bitcoin and the wider cryptocurrency market, including ethereum, Ripple’s XRP and cardano, were hit by a sudden flash crash early Sunday morning, tanking prices (though Elon Musk’s “fav” crypto dogecoin is holding steady).

The bitcoin price, which had this week been on a downward trend toward $60,000 per bitcoin, dropped more than 10% to just over $50,000. The bitcoin price has since somewhat rebounded to trade around $55,000 but remains some distance from its recent near-$65,000 highs.

Ahead of the cryptocurrency flash crash, wiping $300 billion from the combined bitcoin, XRP, cardano and broader $2 trillion crypto market, bitcoin bull and CEO of Galaxy Digital Mike Novogratz warned of a “washout” ahead.

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“In the next week, certainly we could have some volatility because of the excitement around Coinbase,” Novogratz told MarketWatch this week, pointing to the much-hyped Nasdaq
NDAQ
debut of bitcoin and crypto exchange Coinbase on Wednesday.

The bitcoin price climbed to almost $65,000 per bitcoin this week, up around 800% on this time last year, before crashing back early Sunday morning. The long-awaited Coinbase listing also sent the price of major cryptocurrencies ethereum, Ripple’s XRP, binance coin and cardano sharply higher, with dogecoin, a meme-based cryptocurrency created as a “joke,” adding a staggering 400%.

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“I’ve seen a lot of weird coins like dogecoin and even XRP have huge retail spikes, which means there’s a lot of frenzy right now,” said Novogratz. “That never ends well, and so we’ll probably have a washout at one point.”

Dogecoin, a memecoin that’s seen its value soar as retail traders spurred on by Tesla
TSLA
chief executive Elon Musk pile into the cryptocurrency, has surged by around 3,000% since October.

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Meanwhile, XRP, a cryptocurrency controlled by the company Ripple, has rocketed 500% over the last six months despite an ongoing lawsuit brought by the U.S. Securities and Exchange Commission (SEC) accusing the company and its senior executives of misleading investors.

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The bitcoin price, still up almost double where it started the year, has soared as long-awaited institutional investors finally warm to bitcoin and bitcoin strengthens its reputation as a store of value due to Musk’s Tesla giving bitcoin its surprise backing.

This week’s IPO of San Fransisco-based Coinbase, one of the world’s biggest bitcoin and cryptocurrency exchanges, has been called crypto’s “Netscape moment,” with some bitcoin market watchers predicting the IPO will herald the beginning of a “blockchain boom,” similar to the explosion of internet companies in the late 1990s.